If you were going to be flipping houses and obtaining multiple short-terms notes from an investor, they might be better served with a checkbook IRA LLC or Solo 401k if they qualify, as that will minimize the custodial involvement, paperwork and fees for a more active portfolio.There are a lot of ways to create private lending transactions that are win-win, and my example above is just one option.  

This will help minimize your risk of costly and time consuming evictions down the road.

Looking at it this way is pretty close to what we did above, you'd only be looking at minimal cash flow.The big thing you need to figure out is what the actual market rent rate is.

We have a written checklist (not mental): Location- We have a location criteria before we make offersCash Flow/Return on Investment (ROI)- We have a Cash Flow/ROI criteriaARV/Renovation/Equity- Most of what we purchase requires improvements so we have a criteria for the ARV required to support a potential refinance & still leave us w/ equity We try to avoid, minimize or kill the following types of dealsFinancials- Owner won't provide the required financials during the due diligence period.Taxes- We don't have a tax criteria but we always double/triple check if we've purchased a property that has an expiring exemption.  

There is clearly a cost in terms of the minimal tax, cost of tax preparation and the general admin/recordkeeping that goes along with the use of leverage, but the end result is a higher cash-on-cash return for your IRA.

This would free us of the need to pay interest on borrowed funds, and we could each realize a profit with minimal involvement.

I believe the absolute key in buying single family homes in Calgary are, buy with lower amounts of money down and/or figure out a way to minimize your downside risk while keeping your cash flows.

The owner of the house has a seller-finance in place, still owes 135k for property.The owner also has 15k in back taxes on propertyThe owner has a personal loan of 5k for windows, which he wants us to take care of, if possibleHouse needs some touch up work and a new roof within a year, cost ~10kOwner said he will consider a short saleSo I want to minimize the amount of cash I put out for this property.

Loan payment at 15% APR (Depending on property performance to minimize loses) Bank Refinancing for Long Term Holds Refinance Network Primary Lender - Presented Deal prior to closing on property, understands ARV, has agreed that if #s are correct Refi is possible.

If you are able to find someone in the area interested, you could very well minimize your losses by selling directly versus listing it.Similarly, should you decide to fix-up the place, then you'll have to come up with the funds to do that.